HMRC Uncovers Untaxed Money in Grave

A businessman planned to leave £140,000 in his aunt’s grave for 20 years to avoid tax.

Tax inspectors were tipped off and obtained permission from the priest to recover their £50,000 share. The unnamed man was going to leave the money in the grave up to the time limit for tax investigations, reported The Sun.

Dave Hartnett, permanent secretary for tax, said: “Tax evasion isn’t a victimless crime. But we’re getting better at catching cheats. It’s not worth the risk.”

It was disclosed in April that the HM Revenue & Customs has paid informers £437,000 in return for tip-offs since 2007, and prosecutes around 200 people a year for tax evasion.

Investigators announced a crackdown on middle-class professionals earlier this year, with doctors already under greater scrutiny.

HMRC Make £92.3m Confiscation Order

The gang bought luxury houses in London, high performance cars, and built blocks of flats in Dubai after stealing £37.5 million in a ‘missing trader’ VAT tax fraud. The two men, who are currently serving seven year jail terms, will face a further ten years in prison each if they fail to abide by the order.

Richard Meadows, Assistant Director of Criminal Investigation for HMRC, said:

“This is the largest ever confiscation order secured by Revenue & Customs at the end of one of our most complicated investigations. I believe it to be one of the largest confiscation orders in the UK to date. The gang stole £37.5 million in a VAT tax fraud using the cash to invest in luxury property in the UK and abroad.

“We are determined to bring to justice the criminals behind this type of fraud and take away the proceeds of their crime. We have worked very closely with the West Midlands Regional Asset Recovery Team (RART) and law enforcement agencies across the world to bring this case to a successful conclusion.”

Syed Ahmed of Buckinghamshire and Shakeel Ahmad of Middlesex, both currently serving seven year jail terms, were each ordered to repay £92.3 million within two months or face an additional ten years in jail as well as still having to repay the money.

The judge stated the joint minimum payable by both defendants is £92.3 million.

Officers have restrained high value assets including:

• A luxury flat in Knightsbridge worth £4.5 million
• A house in Harrow worth £2 million
• A house in Buckinghamshire worth £1.5 million
• A riverside flat in Battersea worth £500,000
• Two apartment tower blocks in Dubai worth £80 million
• High performance motorcars including a Ferrari 360 Modena convertible and a Mercedes 500CL

They also gave ‘tainted gifts’ to their families including top of the range designer clothing, a Range Rover and cash totalling around £1 million.

His Honour Lord Justice Richard Flaux said:

“You are both complete liars and devious. You are adept at using others in an attempt to make your activities legitimate, creating a smokescreen to hide the value of your assets and conceal this from HMRC.”

Background

Investigations began in April 2002 into the ‘missing trader’ fraud, involving the dishonest manipulation of the VAT system through the import and export of computer processing units (CPUs). The gang used highly complex chains of VAT registered companies both here and abroad to steal £37.5 million.

The final defendant of the 21 strong crime gang was sentenced last month and ended one of the most complex investigations undertaken by HMRC which included seven trials and retrials. In total the gang were jailed for 74 years.

The conspiracy involved the import of CPUs mainly from Ireland VAT free. The goods would then be sold on more cheaply, but with VAT added, through a chain of companies each involved in the plot and sham invoices would be issued. Once the goods had been sold on a number of times they would be exported back to the EU. The exporter would then claim a VAT credit from HMRC for the VAT paid on the purchase of the goods.

The gang would divide the dishonest profits of the fraud and launder them through various bank accounts both in the UK and abroad. The account holders would then withdraw the bulk of the cash and were paid a commission for their dishonest service. Some of the money is believed to have been invested in a third a tonne of gold bullion, substantial property in Dubai and a luxury flat near Harrods.

Emergency Budget

All the key points from the chancellor’s emergency Budget speech

• Calling it an “unavoidable Budget”, George Osborne says Budget details will not be buried in the book.
• Everyone will have to contribute to the recovery, but everyone will also share in the eventual prosperity.
• Estimated growth in the UK economy should hit 1.2% this year, 2.3% next year, 2.8% in 2012, 2.9% in 2013 and 2.7% in both 2014 and 2015.
• CPI rates will be 2.7% at the end of the year before returning to target “in the medium term”, which remains at 2%.
• The UK’s borrowing will fall to 1.1% of GDP within five years.
• Public sector net debt to fall to 67% of GDP by 2015/2016, compared to increases proposed by the previous government.
• Unemployment to peak at 8.1% this year before falling back to 6.15 by 2015.
• Most of the deficit reduction will come from spending cuts. 77% of the reduction will come from savings, while 23% will come from tax rises.
• George Osborne says the structural deficit will be plugged by 2015/16 and is set to be cleared one year early.
• The Civil list will be subject to the same audit by the National Audit Office and will be frozen at £7.9m annually.
• An extra £17bn in savings in public services has been found, equivalent to a 25% across the board cut. Final details will be in the spending review released on 20 October.
• Public sector pay will be frozen for two years, but the 1.7m people earning up to £21,000 will receive a pay rise of £250 a year.
• The small companies rate will be cut to 20%.
• Housing Benefit to be reduced by £1.8bn by the end of Parliament.
• Corporation tax will fall to 24% by 2014, dropping 1% a year.
• Tax relief for the video games industry has been repealed.
• Plans to increase broadband access across the country will be funded by the private sector and not through a broadband levy.
• The threshold for employers National Insurance Contributions will be increased.
• Employers outside of London and the South East will be exempt from National Insurance Contributions for the first £5,000 up to ten employees.
• About £2bn will be raised via a new banking levy charged to large banks.
• The standard rate of VAT will rise to 20% from 17.5% on 4 January 2011, bringing in £13bn a year of extra revenue.
• The increase in cider duty will be reversed at the end of the month.
• Duties on alcohol, tobacco and petrol will remain the same.
• There will be a review of oil prices in time for the next Budget aimed at stabilising pump prices. A further announcement on aviation tax by the next Budget is also expected to change a tax structure which charges each passenger to a per flight tax.
• Personal tax allowance to rise to £7,475 in April, making 23 million taxpayers an extra £170 a year better off and taking nearly a million people out of income tax.
• Capital Gains Tax stays at 18% for standard rate taxpayers but from midnight, those paying the higher rate will see CGT rise to 28%.
• The chancellor has announced that while the CGT rate for entrepreneurs’ relief will remain at 10%, the limit is to increase from £2m to £5m.
• Capital allowances are cut to mitigate more a generous corporation tax regime.
• Allowances for plant and machinery operations are reduced from 20%-18% and from 10%-8% for longer lived assets.
• Pensions will be re-linked to earnings, the state pension will increase in line with the consumer price index or 2.5% whichever is greater.

Story from:
Accountancy Age

Watch the Budget Live

Watch the budget live from Westminister

http://www.parliamentlive.tv/Main/Player.aspx?meetingId=6369

Osborne: Budget will be Harshest for 30 Years

Chancellor George Osborne will claim today that the harshest Budget for 30 years will squeeze the rich more than it hits the poor. He will seek to sell his package of record spending cuts and tax rises as being stamped by fairness as he tries to win public support for a four-year austerity drive.

Nick Clegg moved to pre-empt any revolt by Liberal Democrats last night by insisting that his party’s values were at the heart of Osborne’s assault on the deficit. “This is one of the hardest things we will ever have to do,” he wrote in an e-mail to party members, an acknowledgement that the pain to come will put the coalition under immense strain, The Times reported.

When he delivers the Budget statement, at 12.30pm to the Commons, Osborne will insist that everyone is making a contribution as he tries to distinguish his measures from anything that Labour could portray as a Thatcherite attack on the poor.

A table in the Treasury Red Book, broken up into ten different income bands, will show that the wealthiest will be hit proportionately hardest, according to The Times. This does not factor in how cuts to public services will affect different parts of the country and income groups, nor does it include the Government’s impending drive on benefits.

The Budget will take 880,000 people out of income tax altogether by raising the threshold at which tax is owed by £1,000. Future Budgets will raise the threshold, taking hundreds of thousands more out of income tax — a key Liberal Democrat policy.

A key Tory policy — saving employers the cost of national insurance contributions — will mean that 650,000 workers will be exempted by raising the earnings threshold at which bosses have to start paying.

from AccountancyAge

Elgar Note Fades as 30 June Deadline Looms

The £20 banknote bearing the portrait of composer Sir Edward Elgar, has less than two weeks left in everyday use. On 8 March the Bank of England announced the note’s withdrawal from circulation on 30 June 2010. After this date the Elgar note will no longer have ‘legal tender’ status so will be less likely to be accepted in payment or in change, in retail outlets. The Adam Smith £20, first introduced in 2007, has gradually replaced its Elgar predecessor and continues in circulation.

Andrew Bailey, the Bank’s Chief Cashier and Executive Director, Banking Services, said, “People still holding any Elgar notes should deposit, spend or exchange them now, to avoid any possible difficulties in being able to do this readily after 30 June.” But he wanted to reassure the public, saying, “For several months from the end of June most banks, building societies and Post Offices should accept Elgar £20 notes for deposit to customer accounts and for other customer transactions, although the choice to exchange the notes rests with each institution.” And should anyone have any difficulties or discover their Elgar notes much later, he added, “The Bank of England will always give value for these notes and in fact all other banknotes the Bank has issued.”

Information on how to return Elgar notes to the Bank of England for exchange can be found at: http://www.bankofengland.co.uk/banknotes/about/exchanges.htm

The Elgar £20 banknote was first issued on 22 June 1999. The Adam Smith £20 banknote was first issued on 13 March 2007. In 2009-10 there were some 1.5 billion £20 banknotes in circulation, making it the most common note. Most of these were the Adam Smith notes. The average lifespan of a £20 note is 2 years.

‘Legal tender’ means that if a debtor pays in legal tender the exact amount they owe under the terms of a contract, they have a good defence in law if they are subsequently sued for non-payment of the debt. In practice, the concept of ‘legal tender’ does not govern the acceptability of banknotes as a means of payment. This is essentially a matter for agreement between the parties involved.

The Elgar notes are being withdrawn under authority given to the Bank by virtue of Section 1 (5) of the Currency and Banknotes Act 1954.

Budget Confirmed for 12:30 Start

Chancellor George Osborne has confirmed that he will announce his emergency Budget statement on Tuesday 22 June at 12.30pm.

The address has been brought forward by three hours from its original time of 3:30pm.

Speaking at the Treasury’s offices Mr Osborne said he wanted a Budget that would “show that Britain can live within its means and…provide the solid foundation for a private sector recovery.”

He added that Treasury chief secretary Danny Alexander would meet Cabinet colleagues this week to agree £6bn of cuts in this year’s spending.

UK To Stagger Corporate Tax Cut

The Treasury’s Commercial Secretary has announced the Government’s plans to reform corporation tax over the five-year term of the current parliament.

Speaking in the House of Lords, Lord Sassoon repeated the government’s commitment to “lower, simpler and more predictable taxes.” The secretary said that this month’s budget would include a so-called road map to set out the government’s plans to reform and reduce the tax over the lifetime of this government and to make the tax rate the most competitive of all industrial countries.

Lord Sassoon went on to stress the importance of tax and deregulation to ensure that British industry remains competitive. The secretary, who is responsible for business and financial services in the new government, emphasized that as well as a commitment to bring the UK rate of corporation tax down to the lowest in the G20 within the lifetime of this government, it would be necessary to keep a close watch on regulation and regulatory powers.

The Chancellor George Osborne had already made a pledge to cut corporation tax in a speech he made at the annual Confederation of British Industry (CBI) dinner on May 19. Though the Tory manifesto pledge to cut the tax from 28% to 25% is expected to be honoured, Lord Sassoon’s comments in the House of Lords suggest that the reduction in the rate of corporation tax will take place over the next five years rather than in one hit. Details are expected in the budget statement later this month. Should the rate be cut it will result in the lowest rate of corporation tax in the UK for 45 years.

Though cutting the rate of tax by 3% would cost the Treasury GBP4.5bn per year, the Chancellor suggested that some of the loss of revenue could be recouped by taking additional measures, such as repealing tax relief schemes and tackling tax avoidance.

The CBI generally welcomed the Chancellor’s remarks and Lord Sassoon’s comments have reinforced the likelihood of the tax being cut when the budget is announced later this month.

from Taxnews.com

Emergency Budget Date Announced

The Treasury has confirmed that newly appointed Chancellor George Osborne will present his emergency Budget on Tuesday 22 June, less than six weeks after taking power.

The new Chancellor made the announcement in his first Treasury press conference, in which he also confirmed another Conservative manifesto commitment to create an Office for Budget Responsibility (OBR).

Moving quickly, Osborne said the OBR would be an independent entity like the Monetary Policy Committee that would be responsible for developing “a truly independent assessment of the state of the nation’s finances”. The OBR will be set up initially on a non-statutory basis and be headed by economist Sir Alan Budd. Along with Geoffrey Dicks and Graham Parker he will form a Budget Responsibility Committee and get to work on the forecasts immediately.

The OBR will be put on a statutory footing in next week’s Queen’s speech. For each subsequent Budget and Pre-Budget Report the OBR will confirm whether the government’s policy has a better than 50% chance of achieving its objectives.

Explaining his reasons for the move, Osborne said: “Over the last 13 years the public and the markets have completely lost confidence in government economic forecasts. The last government’s forecasts for growth in the economy, over the past ten years, have on average been out by £13bn. Their forecasts of the budget deficit three years ahead have on average been out by £40bn.”

Previous Chancellors rather than independent officials were responsible for the forecasts and fell victim to the temptation to “fiddle the figures “ by nudging up growth forecasts and reducing borrowing figures to get the numbers to add up, he argued. The government would still set overall fiscal goals and tax and spending policies, but to rebuild public trust , independent forecasts will become the norm, he added.

“I am the first Chancellor to remove the temptation to fiddle the figures by giving up control over the economic and fiscal forecast. I recognise that this will create a rod for my back down the line, and for the backs of future chancellors. That is the whole point. We need to fix the budget to fit the figures, not fix the figures to fit the budget.”

With the £160bn+ deficit uppermost in his mind, Osborne said Treasury assessments confirmed it would be feasible to put £6bn of reductions in place for this year without damaging frontline services. Departmental secretaries ahve been told to resubmit all their pilot schemes and spending plans approved since 1 January to the Treasury. Those that give good value for money and fit the government’s priorities will go ahead, but no more money will be wasted on those that do not.

The emergency Budget will set out the fiscal path and will contain measures to boost enterprise, create a fairer tax system, and demonstrate to the world that Britain is open for business, he added.

The actual content of the 2010 Budget Mark Two will provide plenty of scope for speculation and interpretation among accountants. Last week, Simon Sweetman put forward the following contenders:

• VAT will go up to 20% - it’s fast and would raise lots of money. At the Treasury press conference, prime minister David Cameron said it was “not something we plan to do” but added that taxpayers would have to “wait for the first Budget” to find out if it would happen.
• The main rate of CT will be cut (possibly with the abolition of the small companies’ rate and of the annual investment allowance to pay for it).
• Increase in the rate of CGT on non-business assets - possibly from the day of the Budget. Tax Editor Rebecca Benneyworth anticipates the change due to concerns about the current 32% differential between CGT and the new 50% upper band for income tax, which makes it tempting for high earners to shift their income into capital.
• Employees’ NIC will go up, but not employers’ NIC.
• The personal income tax allowance will increase in the general direction of £10,000.
• The increase in the IHT nil-rate band won’t happen.

The leftovers hanging around from Alistair Darling’s 23 March Budget include the dealing with agents – deliberate wrongdoing legislation. Consultation was extended on the draft clauses until 28 April. The new government has shown itself to be sympathetic to the profession’s concerns. But even with two former PwC employees on the Treasury team, there has been no word yet what view they have taken on this.

While the Tories have fulfilled their pre-election promise to create the OBR, there is no news yet about the planned Office of Tax Simplification (OTS) and its review of small company taxation and IR35. Osborne said he would provide a further update on his activities in a speech to the CBI on Wednesday, or perhaps the OTS might be a surprise he’s saving for the accounting community until 22 June.

As far as symbols go, Osborne has reverted to the more traditional choice of a Tuesday to present his statement, after Gordon Brown opted for Wednesdays early in his period as Chancellor.

From AccountingWeb

‘Next Susan Boyle’ is an Accountant

An accountant is being hailed as the ‘next Susan Boyle’ after wowing the audience and judges at the Manchester auditions of Britain’s Got Talent.

Christopher Stone, 28, of Harrogate, has been dubbed the ‘singing accountant’ by the press following an impressive rendition of Maria from West Side Story on Saturday’s show, making it through to the next round of the competition.

Stone had previously attended music school but dropped out at the age of 20 after being unable to afford the fees.

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